The Australian dollar (AUD) dipped slightly against the US dollar (USD) after a brief rise driven by optimism around US-China trade discussions on Monday. Traders are now looking forward to crucial inflation data from Australia that will be released this week, as this could influence the Reserve Bank of Australia’s (RBA) future policy decisions.
The AUD/USD pair found support following a key agreement between negotiators from the US and China. This development paves the way for a meeting between President Donald Trump and President Xi Jinping on Thursday, where they aim to finalize a trade deal to reduce tensions. After two days of negotiations, Malaysian officials confirmed that both sides reached agreements on significant issues like export controls and transport taxes. Given Australia’s deep trade ties with China, any shifts in China’s economy are likely to affect the Australian dollar (AUD).
U.S. Treasury Secretary Scott Bessent mentioned in an interview that President Trump’s warning of imposing 100% tariffs on Chinese products is “almost off the table.” He also noted China’s commitment to significant purchases of soybeans and a one-year postponement of rare earth export restrictions.
USD struggles on weak inflation data
- The US Dollar Index (DXY), which gauges the dollar’s performance against six major currencies, remains low, trading around 98.90 as of this writing. The dollar is under pressure due to soft inflation data from the US, which has led to expectations of a Fed rate cut.
- The U.S. Bureau of Labor Statistics (BLS) revealed that the Consumer Price Index (CPI) rose by 3.0% year over year in September, a bit below market projections of 3.1%, following a 2.9% increase in August. Monthly CPI saw a 0.3% increase, down from 0.4% the prior month, while core CPI edged up by 0.2% month-on-month against a forecast of 0.3%. Annual core CPI remained steady at 3.0% for September.
- The market is currently pricing in a 97% likelihood of a Fed rate cut in October, and a 96% chance of another reduction in December, according to the CME FedWatch tool.
- Australia’s preliminary S&P Global Manufacturing Purchasing Managers’ Index (PMI) for October fell to 49.7 from 51.4, while the service PMI improved to 53.1 from 52.4 the prior month. The comprehensive PMI also saw a slight increase to 52.6 from the previous 52.4.
- Traders are expecting the RBA to lower interest rates following a surprising increase in unemployment in Australia, which reached its highest level in nearly four years in September. The ASX’s 30-day interbank cash rate futures indicate a 67% chance of the rate being cut to 3.35% at the next RBA meeting.
Australian dollar falls from around 50-day EMA 0.6550
The AUD/USD was trading around 0.6530 on Monday. Technical analysis indicates that the pair is near the upper boundary of a downward channel, hinting that the current bearish trend might ease. The pair is also above its 9-day exponential moving average (EMA), suggesting stronger price momentum in the short term.
The immediate resistance lies at the 50-day EMA around 0.6540, followed by the upper boundary of the descending channel near 0.6550. If the pair breaks past this resistance region, it could move towards 0.6707, which is the 12-month high reached on September 17.
The first support level is at the 9-day EMA around 0.6513. Should it fall below this mark, there might be a weakening of short-term price momentum, and the AUD/USD could drift towards a four-month low of 0.6414, followed by the lower end of the descending channel near 0.6390.
AUD/USD: daily chart
Australian dollar price today
The following table outlines today’s percentage change in the Australian Dollar (AUD) against major currencies. Notably, the Australian dollar was weakest against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | -0.05% | 0.23% | -0.04% | -0.32% | -0.16% | 0.11% | |
| EUR | -0.07% | -0.09% | 0.18% | -0.09% | -0.35% | -0.23% | 0.09% | |
| GBP | 0.05% | 0.09% | 0.27% | 0.00% | -0.25% | -0.14% | 0.17% | |
| JPY | -0.23% | -0.18% | -0.27% | -0.27% | -0.56% | -0.38% | -0.11% | |
| CAD | 0.04% | 0.09% | -0.00% | 0.27% | -0.28% | -0.12% | 0.18% | |
| australian dollar | 0.32% | 0.35% | 0.25% | 0.56% | 0.28% | 0.13% | 0.43% | |
| new zealand dollar | 0.16% | 0.23% | 0.14% | 0.38% | 0.12% | -0.13% | 0.29% | |
| swiss franc | -0.11% | -0.09% | -0.17% | 0.11% | -0.18% | -0.43% | -0.29% |
The heat map illustrates the percentage change among major currencies. The base currency is taken from the left column, and the quote currency is from the top row. For instance, choosing Australian dollars from the left and following the line to US dollars shows the change represented in the box as AUD (Base)/USD (Quote).
